Plutocrat Defeated By 21st Century Lenin In Ecuadorian Elections

Photo: Former President Rafael Correa celebrates with his successor, Lenín Moreno

Ecuador’s so-called Citizens’ Revolution is set to continue for another four years after the socialist-leaning government’s candidate for president, Lenín Moreno, won Sunday’s election with 51.16% of the vote. Moreno defeated Guillermo Lasso, managing director of Ecuador’s third-largest bank and unsuccessful candidate in the 2013 elections.

The government was always favored to hold onto the presidency and maintains a majority in parliament. However, the shrinking of the economy by some 3% between January 2015 and April 2016 due to the collapse in the price of oil fueled calls for political change.

Moreno’s narrow victory was marred by claims of fraud from Lasso and other figures in Lasso’s party. Echoing the Venezuelan elite’s response to losing the 2013 election that followed the death of Hugo Chávez, Lasso said a Moreno government would be “illegitimate”. On Sunday evening, the corporate media ran headlines claiming the election was a “technical tie” and broadcast live feeds of anti-government protests, but as the final votes were counted Moreno’s lead of more than 200,000 votes would not be shifted.

The result was especially significant in that it marked the successful handover of power from Rafael Correa, the charismatic left-wing political economist and President of Ecuador from 2007–2017. Having come to power following a period in which the country had nine different presidents in ten years, Correa went on to become at one point the most popular leader in Latin America. His successes led progressive economists including James Kenneth Galbraith to sign a letter encouraging Ecuador to vote for continuity.

With such an eminent predecessor, Moreno opted for a conciliatory and non-divisive campaign. On a personal level, Moreno (Lenín Voltaire Moreno Garcés, or simply @Lenin on Twitter) cuts a figure that is hard to dislike. Moreno is wheelchair bound, speaks quietly and with humility and will readily break into song during his campaigns. He was formerly the UN Special Envoy on Disability and Accessibility and worked to register and provide carer services to Ecuador’s disabled population. When asked to debate his opponent, Moreno refused; but offered instead to “listen” and “engage in dialogue” with him.

Vanquishing the Banana Republic

This personal style put the spotlight on all that there was to dislike about his opponent. Guillermo Lasso is a billionaire from the coastal city of Guayaquil, which has a history of patriarchal politics led by conservative local business magnates. At the age of 22, Lasso was made vice president of the Ecuadorian arm of a Panamanian bank when it was opened by his brother-in-law. This bank then purchased a majority holding in the Bank of Guayaquil. Lasso was made its managing director when the two banks were merged 13 years later.

While still controlling a major bank, Lasso became a member of the state board regulating the banking sector in 1996. From there, the country saw a liberalization of regulation in the finance industry, culminating in a crash in 1999 which cost millions of Ecuadorians their savings. It was, in a sense, a portent of what the US and Europe were to suffer in 2008 financial crisis.

At this point, Lasso was the Governor of Guayas province as well as vice president of the Banking Association. Following the crash, he became Economics Minister at a time when the Bank of Guayaquil was buying up consumer credit certificates–given to those whose savings were lost in failed banks–at 40-60 cents on the dollar. This preceded a presidential decree that those same certificates be bought by the state at 100 percent of their original value, netting the bank huge profits at the expense of ordinary people.

In short, Lasso is a product of the days when Ecuador was the quintessential banana republic, and judging by his policies he sought to return the country to them. Among his proposals were “incentives” for the involvement of the private sector in healthcare, policing and national parks, the elimination of 14 different taxes, and the elimination of all taxes on the “tourism” sector, including restaurants and bars as well as hotels, resorts, and the like. When pressed on privatization of basic social services, Lasso responded that “the best Minister of Health is the mother” and “the best Minister of Education is the father.”

Although he was not drawn on wages, he was quoted during the campaign by the conservative mayor of Guayaquil as arguing that employment could not be increased unless wages became “competitive”. In this he was referring to the apparently excessive minimum basic salary of USD $500 per month.

All this makes Lasso a figure who provokes considerable animosity among many Ecuadoreans. On the Tuesday prior to the election, Lasso’s attempt to be seen amicably drinking beer at the Ecuador vs Colombia soccer match in Quito backfired when the crowd became aware of his presence and heckled him out of the stadium. Taking the lead from Lasso’s subsequent press conference, the corporate media wrote that the government had paid off a mob to physically attack Lasso and his family.

Earlier in the campaign, pop singer Delfín Quishpe released a sequel to his most famous song, in which he laments his lover who was forced to leave the country during the 1999–2000 crisis. In a clip viewed online more than 250,000 times, Quishpe called Lasso a “scorpion” who was responsible for the financial crisis. The chorus ran: “Un banquero en el poder, no puede ser – A banker in power, it cannot be.” In an election decided by just 2.3 percent, perhaps it made the difference.

The Leftist Success Story Rolls On

Leftist ideals are fine, many say, in theory. If you’re not a socialist at 20, the saying goes, you’ve got no heart; but if you’re still a socialist at 30, you’ve got no brain. Ecuador gives the lie to this disdain for socialism, and is presently the most significant example of what progressive politicians and left-wing economists can achieve in power.

From 2007–2017, Ecuador’s economy doubled in size. At the same time, the proportion of GDP dedicated to social spending went from 3.9% to 9.9%. This allowed the government to extend the reach of health and education institutions while making these services free to all. The government also expanded welfare payments to the worst off. In the words of a far from anti-capitalist source, The Economist:

“Between 2006 and 2011 Ecuador had the world’s most “inclusive” economic growth, according to ODI, a British think-tank; incomes of the poorest 40% of Ecuadoreans grew by eight times the national average. The poverty rate, which started falling in the early 2000s, came down further, from nearly 40% in 2006 to less than 23% in 2016.”

This was financed by four significant policy interventions. Firstly, unlike in so much of the world, corporate tax is actually enforced in Ecuador. Secondly, the government wrote down its unsustainable foreign debt, the interest payments on which were at one stage consuming over 40 percent of the budget. The country has still been able to borrow on international markets since then, though it has been forced to pay an average of 9.64% interest to do so.

Thirdly, the state expanded its activities in oil and mining and levied heavy taxes on private companies operating in this sector. And finally, Ecuador’s central bank made stimulatory loans to the government to ameliorate the impacts of the oil crash. Most of these policies are replicable, depending on the specific context, for governments that actually have the welfare of their people as their core interest.

This economic renewal made many things possible. To speak only of those affecting the rest of the world via climate change, Ecuador now produces more than 95 percent of its electricity from renewable sources. The vast majority is sourced from the network of hydroelectric stations constructed within the past decade in collaboration with Chinese engineers to tap the potential of the mountainous terrain of the Andes. Previously, Ecuador’s primary source of electricity was burning imported natural gas. The gas cookers which are widely used throughout the country are also in the process of being replaced by government subsidized electric stoves.

Similarly, the Socio Bosque (Forest Partners) program has been implemented to prevent deforestation. The program pays communities, 86 percent of which are Amazonian, to protect forests by only permitting fishing and hunting within them. It currently administers over 1.2 million hectares of forests, which represents around 10% of the country’s forested territory.

Finally, the country is investing in mass transit systems in its largest cities. In the capital Quito, an underground Metro system and a network of cable-cars to hillside neighborhoods is underway, while the third-largest city, Cuenca, is being dotted with light-rail stations.

In a country whose GDP per person makes it the world’s 84th richest, such initiatives offer a glimpse of what government for the people could achieve in the world’s wealthy countries. But at the very least, with this most recent election out of the way, Ecuador can now look forward to its future.

The rest of us should look forward to seeing more of what it is capable of.

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Christian is a social anthropologist, who, while working on his honors degree, detailed practices of biopiracy: pharmaceutical firms exploiting the medicinal knowledge of indigenous tribes to claim profitable drug “innovations.” Christian moved to Ecuador in 2013 and spent months at a time among the Shuar indigenous people, the famous “headshrinkers” of Ecuador’s remote southeast, exploring the Shuar’s use of traditional medicine including exploring the Shuar’s use of psychedelics and views on the mind-body connection

Tym is also investigating the political aspects of indigenous organizations, the Shuar being one of the first tribes of the Amazon to federate, and continues to conduct research in this regard in Quito. While in the capital, Tym has become deeply immersed in the political situation. As his access to journalism has increased, Tym has been monitoring the Spanish-speaking South American press and its vociferous treatment of many ruling parties. He has travelled throughout the continent to meet with members of various leftist-indigenous groups.